The new Flats East Bank neighborhood rises like a Phoenix, ascending out of the ashes and dust of what was once Cleveland’s premier entertainment district. Cleveland’s newest neighborhood is a $750 million shining mixed-use jewel that offers trendy hotel accommodations, upscale office space and apartments as well as clubs, restaurants, entertainment venues and an extensive riverfront boardwalk.
But it almost didn’t happen.
Today, Phase I and II have been completed, with Phase III clearly on the radar of its developers: the Wolstein Group and Fairmont Properties. Phase III, which will begin soon, will include a movie theater, more restaurants and clubs as well as street-level retail.
“Phase I and Phase II included the most complicated public-private partnerships ever done, maybe anywhere in the country,” says Adam Fishman, a principal of Fairmont Properties. “We worked with all aspects of government.
“At the end of the day, you have to ask yourself if you have met the social compact of leaving this part of the city better than we found it,” he adds. “Flats East Bank has stabilized the community and increased property values in and around the development. In its early days, it has far exceeded our expectations. Hopefully, in 50 or 100 years, it will have a lasting impact on our city.”
To date, more than 2,500 jobs have been created in the Flats East Bank and more are sure to follow. Perhaps more important, the new neighborhood is creating a tipping point for additional downtown residential development, and it has already become a tourist destination for both local and national travelers.
Like any complex development of its size, the Flats East Bank started with a vision and a dream. It was accomplished through public-private partnerships with the help of nonprofits.
It’s a success formula that’s turning our city around. But it was only fully realized through hard work and persistence.
“My husband, Bert, built shopping centers all over the country, but Cleveland was our home,” says Iris Wolstein, widow of Cleveland business leader, developer and philanthropist Bert Wolstein. “When we had our soccer team [the Cleveland Force], we traveled to many big cities like Philadelphia, Baltimore and San Diego that were all built around beautiful waterfronts, while ours was just sitting there rotting. My husband’s vision was to bring Cleveland up to those standards.”
In the early 80s, the East Bank of the Flats was a vibrant neighborhood offering plenty of entertainment and fun. By the late 80s, numerous bars and clubs populated Old River Road. But by the late 90s, the neighborhood started to stagnate then slowly degenerate.
“Then it seemed like it went downhill in virtually one season,” says Fishman.
While there were still plenty of upscale dining establishments, by 2000, roving bands of underage teens descended on the Flats. Some individually owned clubs offered easy access to cheap beer. News reports of muggings, fights and even people drowning after falling drunk off some of the patios along the river certainly didn’t help.
“Even though there were still some nice places, it really became a neighborhood of the lowest common denominator,” says Fishman.
Despite the degeneration of the neighborhood, the Wolstein family remained committed to the idea of a Cleveland waterfront, slowly buying up what properties they could along Old River Road.
“My husband had the vision of doing something similar to what [our son] Scott and I have done today, but he got tired of fighting with a city that was not receptive,” says Iris Wolstein. “So he talked with Scott, and they decided that it was too big a project to just let go by the wayside. So they decided to do it together.”
Fate played a hand in 2004 when Bert Wolstein — better known as Bart — passed away. But the dream lived on in Scott. Yet there were still significant obstacles. With the district in disrepair, the decision was made to build from the ground up.
“But it was building from the ground up on steroids,” says Fishman. “We not only had to acquire sites with assets, we had to demolish those assets. Then we had to excavate, which included significant brown field remediation as well as urban archeological issues.”
Each of those obstacles was overcome through public-private partnerships.
“For starters, we found the current city administration was much more receptive to the idea of a waterfront development,” says Iris Wolstein.
For instance, the Wolsteins worked with the Port Authority, using its power of eminent domain to help acquire land, with additional help coming from organizations such as the Greater Cleveland Partnership and even federal programs such as EB-5 financial fund, which secured foreign investment. “We couldn’t have gotten the project done without all of them. Everybody participated, from the federal to the state to the county and city,” says Scott Wolstein. “A project of this magnitude and complexity requires some sort of cooperation and support from just about every corner of the community.
“What made this project even more challenging was that the capital markets change while you are trying to do all this. So what might be doable on Monday, might not be doable on Wednesday.”
Just when the developers were ready to break ground in 2008, the real estate market cratered at the beginning of the Great Recession.
“It was also a financial crisis,” says Scott. “There was no real capital available to fund anything with a risk profile above zero. When all four banks that were supposed to finance Phase I pulled out, we just had to shut down.”
The developers went back to the drawing board and kept the dialogue going, hoping the situation would improve.
“At that point in time, nobody but Nostradamus could have possibly known that we would ever do anything,” adds Scott. “It was really bleak.”
Then in 2010, with financial markets recovering, the project seemed to turn a corner. But it still took some creativity to get the project back on track.
“Typically, in a project of this nature, you start first with mortgage financing and try to build subordinate debt and subsidies behind them,” says Scott. “In this case, since there were no first mortgage lenders doing businesses anywhere in the United States, we had to concentrate on getting sub-debt and subsidies in place before we knew that we would get a mortgage.”
Phase I was slated to cost $270 million, with a mortgage of $53 million. Though the developers had pieced together more $200 million in capital, none of it would be made available until that $53 million mortgage was secured.
Wells Fargo stepped up to the plate, in part because of Scott Wolstein’s solid relationships there. “It was the first spec loan on a realtor project in the U.S. by a money center bank coming out of the recession.”
According to Fishman, the Wolsteins remained committed only because they wanted to execute on a vision that was first conceptualized by Bert Wolstein.
“And they remained committed because they wanted to leave this world better than they found it,” said Fishman. “So Scott and his mother, Iris, committed very precious resources in 2008 to keep the project alive. And, very importantly, they also had the commitment of tenants like Ernst & Young and Tucker Ellis, who chose to stay with us as we built the first office tower.”
That tower opened in 2013, and the Aloft Hotel soon followed. In October of 2015, the ribbon was cut, officially opening Phase II.
This version of the Flats does have certain inherent advantages over the previous neighborhood, in addition to its new construction. Unlike the old Flats, it has permanent residents, urban homesteaders who live in upscale apartments above the clubs and entertainment venues. It has new office space that is already fully occupied. It has an upscale hotel that caters to business travelers during the week and suburban tourists on weekends. And it offers clubs, restaurants and entertainment venues that maintain the neighborhood’s up-market personality.
Security is provided through a partnership of Flats East Bank private security forces, the Downtown Cleveland Alliance and the Cleveland Police Department.
“It’s our obligation to remain steadfast in creating the best possible live, work and play district that we possibly can,” says Fishman. “Selling cheap beer to underage kids is not something that will ever happen again.”
Since it turned the corner in 2010, there have only been a few bumps in the road. Toby Keith’s I Love This Bar and Grill build-out fizzled when its owner, Boomtown Entertainment, experienced a series of closings, lawsuits and tax liens across the country.
Ken Stewart’s place also closed this year as the restaurateur decided to focus on his Akron operations. The same location has reopened as Bold Food and Drink, a restaurant from the minds of Demetrios Athenos and Fady Chamoun.
But other than those glitches, it’s full steam ahead. Its visionaries are only now starting to see some return on their investment after years of perseverance.
“It would have been a lot easier to turn our backs and invest that money in other projects. But we kept plugging along,” says Iris Wolstein.
“I can’t say it’s beyond our expectations, because we visualized what we built. But it is very gratifying.”
Dine and Dance
Flats East Bank offers myriad dining and entertainment venues
Dining and Entertainment
» Alley Cat Oyster Bar
With a menu that includes traditional favorites like oysters, mussels, lobster and fresh fish, along with chicken, steak, soup and salads, Alley Cat also offers seasonal open-air dining. This two-story restaurant is available for private parties and showcases expansive views of the Cuyahoga River.
216-574-9999.
» Beerhead
If you’re a beer aficionado, this is your kind of place. The craft beer menu is extensive and includes a fine selection of both drafts and bottles. A nice selection of smallplates and appetizers makes this a great meeting place.
216-621-2000.
» The Big Bang Dueling Pianos
An entertainment venue that brings together two pianos, comedy and audience participation, Big Bang is high energy and fun. 216-417-6222.
» Bold Food and Drink
Open seven days a week for lunch and dinner, Bold offers an intimate, casual ambiance with a nice selection of imaginative dishes from renowned local restaurateurs Demetrios Atheneos and Fady Chamoun. 216-696-8400.
» Coastal Taco
An extensive tequila selection and a wide variety of easily paired tacos should make Coastal Taco a quick favorite when it opens this spring.
» Constantino’s Café
Constantino’s Café offers sandwiches, soups and drinks as well as plenty of coffee selections, including lattes, cappuccino and more. 216-664-9911.
» Crop Rocks
Celebrated local chef Steve Schimoler’s casual vintage bar concept features an informal menu with plenty of comfort food. You’ll also find an amazing collection of music memorabilia, a vintage VW bus and outdoor seating. The vinyl library has more than 15,000 records. 216-902-7110.
» Crop Sticks
A small bistro offering Asian favorites that include everything from king crab rangoons to hand-rolled sushi, duck curry and pad Thai. Also find sake, domestic and craft beers and a selection of tiki-inspired cocktails. 216-902-7110
» Crop On Air
A restaurant and bar dedicated to audience participation and live entertainment. Shows are simulcast online. 216-902-7111
» Flip Side
A chef-driven burger, shake and craft beer concept that offers burgers made exclusively from Ohio-raised, grass-fed beef. Menu also includes unique appetizers, free-range chicken sandwiches and hand-cut, triple-cooked fries. 216-938-9266
» FWD: Forward Day and Night Club
This seasonal outdoor night club offers a members-only swimming pool and cabanas. Live entertainment and exceptional client service take nightlife to never-before-seen heights. 216-417-6282.
» Lago
The anchor restaurant providing exclusive food and beverage service to the Aloft, the appropriately named Lago (Italian for lake) offers a premier view of Lake Erie and the bridges of the Cuyahoga. Lago offers contemporary and traditional Northern Italian cuisine. 216-862-8065.
» Punch Bowl Social
Offering premium and craft brews and cocktails, Punch Bowl Social’s menu and bar items spotlight local purveyors. Enjoy bowling, darts, marbles, ping pong, and vintage arcade games after you’ve eaten. 216-239-1508.
» The Willeyville
Enjoy seasonal American comfort food with an eclectic twist. The Willeyville grinds, cases and twists its own hot dogs with homemade ketchup. It serves lunch and dinner including salads, ramen noodle dishes, salmon tacos and more. 216-862-6422.
» WXYZ Bar
Located in the Aloft Hotel, WXYZ offers draft beer, wine and cocktails as well as entertainment and events. A great place to meet for cocktail hour. 216-400-6469.
Living, Lifestyle, Visiting and Business
» Aloft Hotel
The Aloft hotel offers world-class accommodations and a modern, tech-friendly atmosphere for a memorable and connected visit to Cleveland. 216-400-6469.
» EB Fitness
An upscale fitness club that offers everything from cardio, strength and functional training to Group X classes, personal training and more. 216-458-1000.
» EY Tower
The original anchor of the new Flats East Bank neighborhood, the EY Tower stands tall, a perfect example of postmodern glass curtain- and steel-studded construction. 216-861-5000.
» Flats at East Bank Apartments
Modern appliances, private balconies and an outdoor green space with grills are just a few of the amenities you’ll find here. These upscale apartments also offer floor-to-ceiling windows, spectacular urban views and a 24/7 concierge service. 216-487-7002.